URBANA, Ill. (RFD-TV) — Storing corn and soybeans only pays if it clears costs—and historically speaking, that is rare. For this year’s bumper harvest, any export growth on corn and soybeans is unlikely to absorb the larger U.S. crops. For many, the next leg of demand for these crops will hinge on biofuel policy.
Dr. Carl Zulauf of Ohio State University analyzed net storage returns since 1973 and found that cash storage running past June is usually a loser, as prices tend to fade into late summer.
For storage ending by June, average returns for both cash and futures-hedged strategies did not differ from zero, meaning they typically cover interest and commercial storage fees. Even so, on-farm bins can still pencil through faster harvest, lower field loss, and more flexible delivery/basis choices.
Soybeans have shown somewhat better (though not statistically different) cash returns than corn, consistent with faster demand growth, while hedged storage’s clear advantage is lower risk—especially beyond January.
Seasonals still matter, however, since prices often build from harvesting into late spring, but the edge commonly disappears after June, and most years will not reward any “one more month” bets.
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Biofuel Policies Poised To Anchor U.S. Corn, Soybeans
With export growth unlikely to absorb bigger U.S. crops, the next leg of demand for corn and soybeans will hinge on biofuel policy. That is according to a recent Kansas City Federal Reserve Economic Bulletin, which notes that U.S. yields have increased by more than 20 percent since 2010.
At the same time, the United States’ share of global corn and soy trade has slipped due to ongoing trade frictions and competition from Brazil.
Proposed Renewable Fuel Standard updates for 2026–27 would lift biomass-based diesel quotas about 50 percent from 2024 and bump ethanol and advanced volumes, while counting foreign feedstocks at half the rate of North American inputs — favoring U.S. crops.
The Environmental Protection Agency (EPA) estimates that biodiesel makers would need roughly an additional 250 million gallons annually, which is equal to over 5 million metric tons of additional soybean crush (about 4 percent of U.S. production).
Separately, the extended Clean Fuel Production Credit (45Z) through 2029 — up to $1/gal for North American feedstocks — further tilts processors toward domestic corn and soy oil.
